Moneyball without the ball

Posts from the ‘Tricon Capital (TCN)’ Category

Portfolio Performance

Consolidation

Patience is a difficult virtue. I’ve had 3 weeks of pretty so-so performance, some stocks going up and some stocks going down and overall not much of anything happening. With the market going up seemingly every day its hard to not let that play on your mind.

But you have to have a balance of patience and impatience to do well in stocks. You need to have a healthy level of impatience so that you don’t hold onto positions for too long, but tempered with an equal dose of patience because, as I read some time ago from a cagey market veteran, you will make 80% of your gains for a year in 2-3 weeks, and figuring out which weeks those are is nearly impossible.

In the last few weeks I think I demonstrated a little bit both; witness impatience in my selling of gold stocks and of my position in Tricon Capital and patience as I held on to falling positions in MBIA, Impac Mortgage and watched YRC Worldwide and Yellow Media correct substantially from their highs. Read more

Portfolio Performance

Update

I finished a post over the weekend giving some thoughts about the macro-environment and how it pertains to my portfolio. As a consequence of the conclusions drawn, my portfolio has been growing and my cash level decreasing, to the point where I have now been on margin for the last month and a half. Right now I have about 11% margin. While I am typically wary of using margin, when I look at what I own there are no stocks that I feel compelled to reduce. We’ll see if this turns out to be folly. This is, however, about as much risk as I’m comfortable with, so any stocks added hereon will have to be balanced by equivalent removals. And as per the strategy I profess, I will sell without remorse if the market turns abruptly.

As I’ve tweeted about, early in the new year I took a position in Tricon Capital (TCN.to) after being introduced to the company by a friend in early December. It took me until January to become comfortable with the name and until now to write about it. I’m slow.

I have found Tricon complicated to analyze; they have both an asset management business with a number of separate investment vehicles in addition to an on-balance sheet housing portfolio (which is my primary focus). They are also opaque; like most Asset under Management (AUM) companies the details about the investments held within the vehicles is scattered and incomplete.

The part of Tricon that I am most interested in is its home purchase business. Tricon has been buying properties across the US since Q2. Their purchases have been concentrated in Sacramento, Bay Area, Southern California, Phoenix, Charlotte, and SE Florida. They are looking to expand into LA county (where they recently signed a contract with a management company that would look for an purchase homes in the area), and potentially Orlando. Read more

Portfolio Performance

Short Lived Niko Experience

I wrote about a new position in Niko in a short summary 3 weeks ago. A couple weeks later I sold the stock. What can I say – its part of my process. A lot of times I only get clarity about a stock once I own it. I buy a position, sit on it for a few days or a week, and do some more background and some more thinking on the name. With that my opinion becomes more clear.

The discomfort I developed with Niko was partially the result of another batch of less than stellar drilling results, but mostly the result of my conclusion that this isn’t the right time yet. The driver of the share price will be the settlement of a new gas price contract in India. I don’t think this is likely to occur until the existing contract expires, which is not until next year. In the mean time Niko will continue to experience production declines in India, and they are open to negative news flow on drilling. Read more

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